December 1, 2009

Taking the Heat

Nobody said climate change negotiations would be easy. From the outset, they combined the most divisive aspects of nuclear disarmament negotiations and world trade talks, splitting the world between “haves” and “have nots” and developed and developing states. On both the WTO’s Doha Round and the Comprehensive Test Ban Treaty, India found itself at the vanguard of opposition to the West, with damaging but fortunately not disastrous political consequences. It appeared that a similar outcome was inevitable on climate negotiations.

However, despite increasing concerns, India may not have to play its usual role of obstructionist at this month’s United Nations Climate Change Conference in Copenhagen. Enduring rifts between developed and developing countries, alternate proposals being forwarded, and domestic politics in industrialised states threaten to postpone any agreement, especially one that can be considered legally binding. Over the past several months, expectations for Copenhagen have been lowered, and even optimistic forecasts predict only a political arrangement in principle that could pave the way for a binding agreement at a future UN conference.

Mounting difficulties

In the run up to Copenhagen, difficulties are looking increasingly insurmountable. Critics in several industrialised countries have alleged that a Copenhagen agreement would impinge on the sovereignty of individual states. Many are sceptical whether a workable agreement on climate change could be WTO-compliant. In the United States, the world’s second largest emitter, Congressional ratification will be required for any such agreement—an added complication. For example, a bipartisan effort to move forward in the Senate prior to Copenhagen is unlikely to come even close to the widely-accepted recommendations of the scientific community, which call for deep and immediate cuts in global emissions. (The Fourth Assessment Report of the UN Intergovernmental Panel on Climate Change, representing the scientific consensus, recommends a 50-85 percent reduction in emissions over 2000 levels by 2050 so that temperatures do not increase more than 2.0-2.4 degrees Celsius over pre-industrial levels.)

Moreover, the US Congress will have added excuse to drag its feet on climate legislation based on other countries’ lack of commitment to the negotiation process. It does not help that negotiations are often framed as zero-sum: if the difference between current carbon levels and the targets widely seen by the scientific community as necessary is not filled by emissions by one state, it certainly will be by another. As long as the negotiations as seen as a division of spoils, each country, barring perhaps some of the smaller, wealthier and more vulnerable ones, can be expected to commit to the least stringent limitations possible.

Equally complicating are the various competing proposals being floated, which are not necessarily based on the dichotomy between countries classified by the UN Framework Convention on Climate Change as industrial (or “Annex I”) and developing. While this separation makes sense at several levels, it is often criticised for being based on outmoded notions of prosperity, whereby Ukraine, Belarus and Turkey fall under Annex I, but Singapore, Qatar and Kuwait do not. Transfers from developed to developing countries are likely to be in the tens of billions of dollars per year, and to countries placed at a disadvantage by this distinction, it is all the more reason to start anew. For example, Australia, championing one proposal under consideration, produces emissions equal to France, despite having a population and economy half its size. On the other hand, states benefiting from their positions as developing countries, including several African countries forming a sizeable negotiating bloc, are unlikely to accept a radical reworking of the traditional designations, which were at the center of the Kyoto Protocol adopted in 1997.

With the difficulties so apparent at the international level, India might not even be required to play a major role at Copenhagen, either as facilitator or as veto-wielder. That the issue has recently received a higher profile in public discourse is nevertheless a positive sign, for India will have to stake out a position in the near future. Exactly how it negotiates this issue could have significant implications for its domestic politics, energy security, economic performance and development prospects.

A Flexible Approach?

Like most controversies, this one began with a leaked memo. In July this year, Jairam Ramesh, the environment minister, flatly rejected the possibility of India accepting legally binding caps on emissions in the presence of visiting US Secretary of State, Hillary Clinton. Three months later, he appeared to have reconsidered his stance, at least in private. Writing to the prime minister on October 13, Mr Ramesh recommended a position that would “bring the US into the mainstream, if need be through a special mechanism, without diluting basic Annex 1/non-Annex distinctions.” Furthermore, recognising that India would be seen as obstructionist by developed and smaller countries eager for a deal, and possibly even blamed for preventing a major breakthrough, Mr Ramesh suggested a “nuanced” approach to India’s demands for mitigating technology and resources from the developed world. The memo was written shortly after the United States brought in its big names—including former Al Gore, former vice-president, Stephen Chu, US energy secretary, Todd Stern, special envoy on climate change and Senator John Kerry—to engage specifically with India on the issue

Not surprisingly, Mr Ramesh was slammed, especially by the left, for seeming to give in to US pressure, while placing at risk the prospects of development for hundreds of millions of Indians. Outlook magazine carried a cartoon depicting Mr Ramesh sweeping up after Uncle Sam, who had left large dirty footprints in his wake and had clouds of smoke billowing from his cigar. T Jayaraman, writing in The Hindu, argued that this being a zero-sum contest, India could not afford to give away any concessions: “The central issue for India remains that of ensuring deep and binding emission cuts by the developed nations with suitable compensation for their occupation of the global commons through financial and IPR-free technological transfers.” Others have defended Mr Ramesh’s demonstration of flexibility, arguing that a proactive Indian position could give it an advantage over competitors on carbon permit allocations. While that might be true, it neglects the political hurdles that would have to be overcome at home.

It should be noted, however, that India does not necessarily have to retread the industrial path taken by the West, and emulated by East Asia, although it should not be forcibly prevented from doing so. India has acquired a competitive advantage in high-end manufacturing, which often involves lower emissions and greater efficiency. In fact, India’s chronic energy shortfalls have rather counterintuitively made its industries already more efficient, as much out of necessity as out of altruism. India already boasts among the most efficient steel and cement manufacturing capabilities in the world. The Tata Nano, the so-called people’s car, has a fuel efficiency 90 percent that of the famously eco-friendly hybrid Toyota Prius—yet the Western media’s reaction as it contemplated the environmental hazards of millions of cheap Indian cars demonstrated double standards of the sort that riddle the climate change negotiations on a larger scale.

Looking ahead, at least three elements appear likely in India’s future energy mix. With coal expected to retain its cost-effectiveness, carbon capture and sequestration technology transfers will almost certainly be useful, if not necessary. But attaining the requisite technology may not be enough, as the increased cost of energy produced by such coal-fired plants will require financial off-sets if they are not to involve higher costs for consumers. India may also opt to tap its extensive solar energy potential, as it remains the renewable energy source most likely to fulfil its growing requirements. Finally, with the passage of the Nuclear Suppliers Group waiver last year, India can now seriously consider importing nuclear fuel, equipment and technology, following the model of countries like France.

The Need for Compromise

Arguably, the root cause of the difficulty India will face at Copenhagen and beyond is the overlapping red lines drawn by Indian economic and political imperatives on the one hand and international environmental advocates on the other. Even though it may be afforded some diplomatic wiggle room, the Indian political establishment—as the episode involving Mr Ramesh demonstrated—cannot afford to compromise the development potential of the state. This is motivated not just by narrow calculations concerning political survival, but also any leadership’s reading of the national interest. India’s red line therefore appears to hover somewhere close to per capita emission standards. The government has publicly stated, for example, its commitment not to exceed the developed countries’ per capita emissions.

A better compromise solution may involve linking emissions to units of economic output. This would incentivise energy efficiency, not place limits on economic development, and still curb emissions. From a political standpoint, it would help close the developed-developing divide. An additional possibility of reaching agreement, through industries and producers rather than states so as to avoid restricting consumers, makes sense both from a political perspective and in the light of the global economic slowdown. Such a regime would also be easier to monitor and verify, and help ensure that no state would be placed at a significant disadvantage.

Unfortunately, many in the developed world, including those who feel strongly about the need to come to agreement on the issue, say that such compromises and unilateral commitments are not effective enough. India is already the world’s fourth largest producer of greenhouse gases, and if their emissions per capita were comparable to the developed world, India and China between then would drive carbon concentrations in the atmosphere far above permissible levels.

The combination of the zero-sum nature of the debate, domestic political considerations, proposals to scrap the critical bargain of the Kyoto Protocol, and overlapping red lines between environmental groups and developing states therefore leave almost no room for a workable compromise. This is unfortunate, because unlike the Doha Round, where the narrowing gap between rich and poor states increases the likelihood of agreement over the long-term, addressing the problems associated with climate change cannot be continuously postponed without making negotiations more difficult year on year.